CIVIL PROCEDURE BACK TO BASICS 5: SCHEDULES AND COUNTER-SCHEDULES: NOT A NUMBER-CRUNCHING EXERCISE

If there is anything that suffers from being taken for granted it is the basic schedule and counter-schedule. This is demonstrated in the judgment available today in Wright v Satellite Information Services Ltd [2018] EWHC 812 (QB) Mrs Justice Yip. The appeal was about allegations of fundamental dishonesty because a claim for care was unsupported by evidence. The point was made that a schedule is not simply number-crunching. It is part of the process of advocacy.  Further, as that case shows, a Schedule that is drafted in a manner that is incomprehensible is a positive danger to the client.

 “It is very important that lawyers draft the schedule in such a way that the facts to which the client is attesting are clear. Failing to do so is failing in their duty both to the client and to the court.”

 THE SCHEDULE AND COUNTER-SCHEDULE

The judge observed that the schedule was incomprehensible to the claimant.

1. It seems to me that the importance of the schedule of loss is frequently overlooked. This is, or should be, the document that draws together the presentation of the claim. It ought to be presented in an accessible and easy to follow format. The fact that the schedule of loss is required to be supported by a statement of truth highlights the need for it to be readily understandable by the claimant. It also sets out the claim for the defendant and for the trial judge who will come to the case afresh and ought to be able to follow the case from the schedule. This means that it should not simply be a series of calculations. It needs to be supported by sufficient narrative to explain the case being presented by the claimant.

2. With the exception of the claim for loss of earnings the schedule in this case did not serve that purpose. I note that the Claimant said in cross-examination that he regarded the schedule as similar to a set of accounts prepared by an accountant that he would sign in reliance upon the professional expertise of the drafter. I have some sympathy with that position given the format of the schedule here. However, that is not the right approach. Claimants will be fixed with knowledge of and taken to have certified the truth of the contents. It is very important that lawyers draft the schedule in such a way that the facts to which the client is attesting are clear. Failing to do so is failing in their duty both to the client and to the court.

3. I note the contrast between the schedule and the counter-schedule in this case. It was immediately apparent to me that the counter-schedule was a well drafted document clearly setting out the Defendant’s case. I note that the counter-schedule was drafted by Ms Foster who was trial counsel. It properly fulfilled its purpose. It does need to be appreciated that schedules and counter-schedules are an essential part of the advocacy in a case. In my view, they need to be drafted by lawyers with sufficient experience and skill to properly present the claim as it will be presented at trial, particularly in a contentious case such as this. This claim and the appeal highlight the dangers of treating the schedule as little more than a number-crunching exercise.

COMPARE AND CONTRAST…

It is interesting to draw a comparison to the judgment of Mr Justice Jay in Hayden -v- Maidstone & Tunbridge Wells NHS Trust [2016] EWHC 3276 illustrates this point. The judge was determining damages for personal injury. He commented on the Schedule and Counter-Schedule.

“The final updated Schedule extends to 89 pages and is far too long. It contains unwarranted discussion, argument and submission. On the other hand, the Defendant’s Counter-Schedule, dated 15^th November 2016, is unduly Spartan, and only addresses the Defendant’s best case”

GUIDANCE FROM THE RULES

Guidance is fairly scant. At  PD.16

The Schedule

“4.2  The claimant must attach to his particulars of claim a schedule of details of any past and future expenses and losses which he claims.”

The Counter-Schedule

“12.2  Where the claim is for personal injuries and the claimant has included a schedule of past and future expenses and losses, the defendant should include in or attach to his defence a counter-schedule stating:

(1) which of those items he –

(a) agrees,

(b) disputes, or

(c) neither agrees nor disputes but has no knowledge of, and

(2) where any items are disputed, supplying alternative figures where appropriate”

PROBLEMATIC SCHEDULES

Everyone who drafts schedules should read the judgment of Mr Justice Langstaff in F and S -v- TH [2016] EWHC 1605 (QB).

“The thrust of Mr Fewtrell’s cross examination was that the schedule was a fiction. I have little doubt that is the case. Indeed, the point was recognised on behalf of both Claimants…”

“F said that the figures were not his. The difficulty for him is that the claim is his. The documentation was verified with a statement of truth. I must take it that the schedule was prepared on his instructions and in accordance with them, and put forward with his authority. I had no evidence it was not.”

See Drafting a schedule of damages: better read this; works of fiction are never going to help.

UNRELIABLE SCHEDULES ARE POSITIVELY DAMAGING

Mr Justice Stuart-Smith in Arroyo -v-Equion Energia Limited [2016] EWHC 1699 TCC commented on the claimants’ schedules in a major test case:

“In the event, the Original Schedules of Loss were shown to be quite unreliable and, in many respects, bore little or no relation what had happened or the evidence of the Claimants…

When Snr Mesa (LC54) was asked if he had known that, by his Original Schedule of Loss, he had claimed COP 3.9 billion (roughly equivalent to £1-1.3 million) the look of astonishment on his face was real and unforgettable. His immediate reaction was that perhaps the COP 3.9 billion was “a group loss” and not his loss alone {Day7/25:3}. He was clear in his evidence that he had not known that such sums were being claimed in his name. I accept that evidence. It raises the wider question how the Original Schedules of Loss came to be prepared…

“In the light of the extent to which the case on quantum as set out in the Original Schedules of Loss has been shown to be inaccurate and the ready explanation for such inaccuracies which Leigh Day’s letter provides, I am unable to place any weight upon the Original Schedules of Loss as being an accurate reflection of any losses that the Claimants may have suffered or the causation of those losses, despite the fact of their having been incorporated as part of the Claimants’ pleaded case, backed by a statement of truth. It does not reflect adversely upon the Claimants themselves, since they were not involved in and were not personally responsible for the construct that was placed upon the information they provided or for the fact that the Schedules were put forward as real statements of the Claimants’ factual case and losses.”

Unchecked schedules of damages

NO INSTRUCTIONS FROM THE CLIENT (AND YET THE SOLICITOR SIGNED THE SCHEDULE)

This matter was considered on a much different scale in Brown -v- Haven a case where a solicitor was ordered to pay wasted costs.

The solicitor who had signed the schedule produced a witness statement and was cross-examined on the signature to the Schedule. The judge observed:-

16. It is crystal clear that certainly at the time this lady signed the updated schedule of damages and the statement of truth that she did not have specific instructions. It is clear on the balance of probabilities that the procedure in both Bollin and Amanda Cunliffe is to get a general form of authority from the client and then to sign any documents that they consider to be appropriate and tell the clients that they have done it thereafter. That was the clear evidence I had before me today.

Schedules of Damages, wasted costs and the statement of truth.

SCHEDULES SHOULD HAVE BEEN SORTED IN ADVANCE OF TRIAL

In Redd Factors  -v- Bombadier Transportation [2014] EWCH 3138 (QB) this process clearly went awry.  It illustrates the importance of taking steps, and obtaining directions, which allow the issues in dispute to be identified prior to the trial starting.

THE ISSUES

The action concerned a dispute between two companies about the amount of and liability under invoices and whether there could be a set-off against those invoices.

(The reference to “FIM” is a reference to “Free Issue Material”

tween two companies about the amount of and liability under invoices and whether there could be a set-off against those invoices.

(The reference to “FIM” is a reference to “Free Issue Material”

THE JUDGMENT

Procedural matters

1. It might have been thought, given the nature of the disputes about invoices and costs incurred in obtaining FIM, that the parties needed to co-operate in the preparation of the case to: identify a list of issues; produce a schedule setting out their respective cases on each disputed invoice; and produce a separate schedule setting out their respective cases on the relevant claims for FIM.

2. None of these steps had been taken before the trial, and issues wholly unknown and unknowable to the other party surfaced for the first time in cross examination on both sides. The fact that the parties had not any realistic idea of the issues which were going to be raised at the trial was part evidenced by the fact that the time estimate given for the trial was “5 to 10 days“.

3. In my judgment both sides were to blame for this state of affairs. This is because neither side had suggested, let alone made an application to the Court for: a further case management conference in circumstances where the issues had not crystallised before the previous case management conference; the production of relevant schedules; and a list of issues. It is right to record that the Claimant had requested further information from the Defendant, and had obtained an order to that effect, but the request had not identified the critical need for both parties to set out their respective cases on each relevant disputed matter. It should also be recorded that the Defendant had simply served bundles of invoices (forming 15 of the 26 bundles before me) to evidence the FIM claim.

4. In these circumstances the only realistic options available to me were either to adjourn the trial and list it again in the future, which would have inconvenienced other Court users and caused further delays for these parties, or to attempt to do the best that I could in the time allowed for the hearing. As it was I took the latter course and I made a number of orders providing for a list of issues and the production of relevant schedules. I also permitted a witness to be recalled to enable him to deal with matters which had arisen in the trial. I also directed the parties to attempt to agree various matters, or produce short submissions setting out their respective contentions. An example of this related to the date on which train seats had been delivered by Primarius to Bombardier, which was relevant to certain claims, and which had not been addressed in the evidence of either party.

5. In the event the case had been listed to be heard over 8 days, and this meant that it was possible for the parties during the trial to do the work that should have been done before the trial, and for the real issues to be identified. In my judgment permitting the parties to deal with issues in this way was consistent with the approach to the Civil Procedure Rules suggested in Denton v TH White Limited and other cases [2014] EWCA Civ 906 because it enabled the real issues to be identified in circumstances where both parties had been at fault in the pre-trial preparation. Whatever the final result there are likely to be costs consequences of the approach taken by the parties to the preparation of this trial.

   Sorting major problems out in the middle of a trial: Schedules and statement of issues should be prepared in advance not during a trial.

THE BEST GUIDANCE GOING

Useful guidance (of universal applicability) can be found in Duncum -v- Churm (HH Judge Harris QC, Oxford County Court 12th September 2014, transcript available on Lawtel).  That case is about costs and Part 36.  Matters did not turn out well for the claimant who turned down a Part 36 offer and was penalised with costs when it was accepted late.  The judge’s observations on the role of those putting forward claims for damages are essential reading.

“ It is appropriate to observe that, when composing schedules of damages in personal injury cases, the authors of such schedules will of course put the case towards the top end of the bracket which it may legitimately inhabit. It is tactically unsound to cast a case too low at an early stage and all professional litigators clearly understand that reductions are likely to be necessary from theoretically arguable calculations in order to quantify a realistic view of the value of the claim, in order to negotiate productively, and in order to appear reasonable and thus persuasive should the case come to trial. But there must be a sound and honest evidential basis for an initial schedule. It is not appropriate, as a tactic, to quantify, for example, a case with a true worth of £200,000 at £1,000,000, five times as much. This is because questions of honesty apart, which are of course important, such a discrepancy will be unsupported by evidence and will go far beyond putting a valuation at the top end of a legitimate bracket, and because such an approach is likely to produce an unfruitful negotiation and an unnecessary trial. A Defendant might quite understandably say, well if that is what you are after, there is no point in our talking. Another consequence, though not an inter-parties matter, is that an honest Claimant is likely to be acutely disappointed.”

Proportionality and survival for litigators 4: Claim only what you can prove.

COUNTER-SCHEDULES: THE MOST NEGLECTED WEAPON IN THE DEFENDANT’S ARMOURY

As the judge observed in the Hayden case the defendant’s schedule was “sparse”, it only dealt with the defendant’s best case. This approach (although tempting) carries major risks for defendants.  Any document that has no credibility is likely to be ignored. The path is left open for the judge to prefer the claimant’s figures

I CAN DISPUTE DAMAGES, OH NO YOU CAN’T

One counter-schedule (produced by a firm of solicitors) read “The Defendant denies liability. It does not have to pay the Claimant damages” (that was it)

I have heard that (and this is anecdotal “evidence” only) some judges are not allowing defendants to challenge damages in cases where a counter-schedule has not been filed.  This could be an interesting issue in the future.  A failure to file a counter-schedule (or any meaningful counter-schedule) may lead to the court finding that the claimant’s figures are admitted, or that the defendant cannot raise new issues at trial when the counter-schedule should have set these out at the beginning of the action